What are the Advantages of Real Estate Investment in Turkey? And the Types of Real Estate Investment in Turkey
The Turkish economy is urging steps to become one of the fastest growing economies, according to economic forecasts, and what strengthens these expectations: The qualitative boom in the Turkish economy, where the gross national product jumped from 230 billion US dollars in 2002 to 820 billion US dollars in 2013. The Turkish economy is ranked sixteenth (at the world level) and sixth (at the level of Europe). All this makes investing in Turkey an encouraging and promising project.
Among the most important areas of investment in Turkey are the real estate sector, the auto industry, agriculture and food, general commercial, health care and medicine, the auto industry, financial services, communications and information, and many other fields.
Investing in real estate is one of the best types of real estate investment in Turkey, because real estate investment is greatly affected by the country’s economy and political stability, and indicators of rapid growth and prosperity in the Turkish economy have passed through us, which encouraged investors to put their money in the Turkish real estate sector. Real estate is also the largest growing and profitable sector in the world. Investing in real estate delivers guaranteed results without risk.
The Turkish real estate sector has witnessed a great and remarkable development during the past two decades, to the point that it has become one of the most important pillars of the Turkish economy. The real estate law promulgated in 2012 was a turning point in the real estate sector in Turkey, according to which the principle of reciprocity was abolished, prompting an increase in investment in this area.
According to the International Knight Frank Index, Turkey has entered one of the largest global markets in the growth of real estate prices. This led to a permanent rise in apartment prices in Turkey due to continuous foreign demand. According to Ernst & Young, Turkey is ranked second among the most attractive markets. Several other indicators also nominate Turkey’s real estate markets to present the best achievements in the coming years.
Istanbul is the preferred destination for most Arab investors, due to the huge commercial and tourist activity that this city has, followed by Antalya and the Yelwa Stock Exchange.
Advantages of real estate investment in Turkey:
1- Turkey’s strategic location:
Turkey is located on the connecting road between Europe and the Middle East, and thus it has attracted European and Arab investors to invest in real estate on its territory.
2- Facilities provided by the Turkish government:
This is through the laws and legislation, such as the law abolishing the principle of reciprocity in 2012, which was considered a turning point in the Turkish real estate sector. Turkish laws are also characterized by flexibility, simplicity and without complications.
3- Turkish citizenship law:
At the beginning of 2017, the government approved a law allowing those who owned one or several properties worth one million dollars to apply for Turkish citizenship, and then the text of the law was amended in 2018, when it decided to reduce the property’s value to 250 thousand dollars.
4- The fertile investment environment:
The Turkish government is urging the creation of fertile investment grounds, such as the construction of the Istanbul Canal, the Istanbul Airport project, metro networks and lines, transportation, public squares, botanical gardens, hospitals, and much more.
5- The low value of taxes in Turkey compared to others.
Taxes in Turkey are relatively low, as the annual real estate tax ranges between 1 – 2 per thousand in Turkey.
6- Real estate investment was positively affected by the fluctuations of the Turkish lira exchange rate:
The lower the value of the Turkish lira, the higher the value of the property.
7- Real estate investment is the most appropriate solution to avoid inflation problems:
The Middle East has witnessed economic and political crises that have exposed many investors and capital owners to economic crises. Inflation has led to local currencies losing their purchasing power, prompting investors to convert their money into foreign currencies.
It is worth noting that buying real estate is safer and more secure than buying foreign currencies, as the lower the currency’s value, the higher the property’s value.
Types of real estate investment in Turkey:
Real estate investment in Turkey is divided into two parts: residential real estate investment and commercial real estate investment.
1- Residential real estate investment
That is, investing in real estate that is used for residential purposes only.
Among its advantages / pros: easy to find a tenant, there are people looking for places to live throughout the year, in addition to the ease of selling residential properties, especially when they are located in a distinctive area.
As for the negatives of residential real estate investment in Turkey, they are: Dealing directly with tenants and asking them to solve some of the problems that they may find in the property, and this can be avoided if the owner contracts with a real estate company that takes on this task instead of him. Also, the tenant may not be obligated to pay the rent on time.
2- Commercial real estate investment
It is an investment in real estate that is not inhabited by a family, such as investment in offices, shops, hotels, student housing, or real estate that is used for industrial purposes.
Among the advantages and advantages of commercial real estate investment in Turkey: The monthly income and investment returns from the property are relatively high. Also, the property owner does not have to deal with the expenses related to the maintenance or development of the property, because the tenant is often the one authorized to deal with the property in a manner that suits his work and the purpose of renting it. Also, the owner of the property does not face financial problems with the tenants because they dearly have money as they are the owners of commercial projects, and they will not delay paying the rent at the specified times.
As for the disadvantages and disadvantages of commercial real estate investment in Turkey, it is difficult to find tenants at times. And being affected by general economic conditions, and it may be difficult to sell the property, because the demand for buying commercial real estate is not as intense as investing in residential real estate.
To review all real estate investment options in Turkey, or to obtain specific information about owning a property in Turkey for housing or investment, our team is ready to provide the best services and real estate advice, Contact us now.